Internal Factors of SWOT
A Strength Weakness Opportunity Threat (SWOT) analysis is a method for evaluating the firm and its environment. A SWOT analysis consist of two parts--the internal and the external factors. The internal factors are the firm's strengths and weaknesses. Because these are the factors that managers can affect, it is important that they understand what they are and how they can benefit an organization.
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What Are Internal Factors?
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Internal factors, the strengths and weaknesses of the firm, are the factors that are within the control of the firm. They are contrasted with external factors, the opportunities and threats to the firm, which are outside the control of the firm. Simply put, the internal factors in SWOT are those factors which the firm can change or improve.
Strengths
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In a SWOT analysis, a firm's strengths are any internal attributes that give the business a competitive advantage. An example of a strength could be superior technological knowledge, a highly trained sales force or a brand name that is widely recognized and highly esteemed. These are all internal sources of competitive advantage in the marketplace.
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Weaknesses
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A weakness, in terms of a SWOT analysis, is any internal shortcoming of the firm. Essentially any strength has the ability to be a weakness and vice versa. For example, if a firm has a strong marketing department it could be a strength, but if the marketing is inferior it may be a weakness. The objective is, therefore, to minimize a firm's weaknesses by converting them into strengths.
Relationship With External Factors
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The internal factors -- strengths and weaknesses -- are closely related to the external factors -- opportunities and threats -- in a SWOT analysis. A firm should try to use its internal strengths in order to exploit external opportunities. At the same time it needs to be aware of external threats and how they may take advantage of internal weaknesses.
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